Sometimes the market fails. Usually when markets fail to price things based on their true costs, e.g. pollution dumped into the commons or free riders who take advantage uneven policies and can produce stuff cheaper. Although not strictly a market failure, I will use insulin to frame the failure of Ken Calvert.
Remember CA’s completely out of tough congressmen who voted to support Trump’s election lies? Ken Calvert also wants to penalize some 10 million Americans that rely on insulin–voting no for the 2022 Insulin Affordability Act. Why? Because he fails to appreciate how hard it is for Americans to get reasonable medical care and how pharmaceuticals capitalize on their reliance on an over-priced medicine.
The market for insulin is inelastic — in other words, the demand does not respond to the price. Why? Because people need insulin to live! The alternative to not take insulin is quite unappealing.
But don’t we treasure the idea that we shouldn’t dictate how to run businesses? Isn’t the bill another example of democratic overreach into the function of our free market system? Something that might be seen as socialism? Hum… it’s a bit of trojan horse, so let’s deal with the first issue.
Here’s the real question: Why is insulin so expensive for patients? Apparently the price has increased 1000% since 1999, while the cost has remained the same in other countries. It has to do with inelastic demand, new patented formulations with modest health improvements, regulatory complexity, and weak government oversight. So the answer is complicated, but holding pharmaceutical and insurance companies to cost limits is a good, but imperfect, way to start. To make this totally clear: No policy is perfect, but some are better than others. This law is a good start, and doing nothing is a policy– a policy that favors the wealthy and maintains huge burdens on the vulnerable to the demise of us all.
But let’s get back to Mr. Calvert — the Gilded Age apologist. Who cares of the market is failing 10 million Americans? Calvert Doesn’t. Who cares if there is an inelastic market that pharmaceuticals are taking advantage to maintain their profits? Calvert Doesn’t. Who cares that there is a social cost of poor medical outcomes that we all pay if we don’t do better? Calvert doesn’t.
I wonder what Calvert celebrates? As far as I can tell high profits for pharmaceutical companies, price gouging for ordinary Americans, and the sacred cow of a free market that fails the public good. Congratulations Ken, we all know that you don’t care about the public good either. Say good bye to your mediocre performance representing California in November. You have failed your constituents for the last time.
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